4 of the most pressing challenges health systems face today

To succeed in an era characterized by uncertainty and rapid change, hospitals must become more nimble and proactive. Faced with changes to regulations, reimbursement and technology, organizations that fail to adapt will lose out to their more agile peers.

Still, unpredictability regarding these changes is affecting business. Sixty percent of hospital executives listed potential changes to the ACA — which are still up in the air — as their chief concern for 2017, an increase from 33 percent in 2016, according to Capital One's annual survey on M&A trends. While the velocity of change may be overwhelming, the best thing hospitals and health systems can do is remain agile, five panelists said during a webinar April 25 sponsored by Workday, a financial management, human capital management and supply chain applications vendor based in Pleasanton, Calif.

The five executives from healthcare organizations across the U.S. spoke about the most crucial changes facing their institutions. Here are the four most pressing issues panelists raised.

1. Keeping pace in healthcare's transformation to consumerism

Consumers now expect similar experiences from healthcare organizations as other business-to-consumer interactions in their daily lives, be it with a hotel, airline or restaurant. This shift in attitude is one of the most pervasive changes in healthcare — and therefore one of the top areas of concern among executives.

Healthcare leaders must now devise ways to meet consumer demand while maintaining cultures of healing and stable business operations. Many hospitals have or are in the process of deploying patient engagement tools, such as cost estimators or mobile scheduling options.

However, attempts to engage consumers are moot if engagement platforms don't create value for patients and providers, said Becky Adams, strategic healthcare industry advisor for Workday. Hospitals must do three things to ensure technology supports consumer-oriented processes, she said: "Create value at the business level, create value at the patient experience level and build foundational capabilities to support infrastructure."

Establishing a culture of consumerism also plays an important role in organizations' talent acquisition and retention. Olesea Azevedo, chief human resource officer of Altamonte Springs, Fla.-based Adventist Health System, said, "As we look at our talent, we have to think through the life-cycle of the employee," starting when they begin their career with a health system. She said this presents "an opportunity to be able to figure out how we can move the organization" and its staff toward a consumer-oriented culture.

2. Shifting workforce demographics and rising physician burnout

Many healthcare organizations are experiencing generational transitions as longtime leaders in the baby boomer group retire and millennials join or advance in the workforce. Millennials now represent the largest share of the American workforce, but the healthcare industry is not attracting these emerging professionals as well as other industries, according to Vic Buzachero, senior vice president of San Diego-based Scripps Health.

"Other industries may be picking off the top 25 percent or maybe the top two quartiles, leaving us with only millennials who are dedicated to science or dedicated to caring for people and those who like the stability of our industry," he said. When it comes to IT, healthcare organizations are pulling from what is left in the labor market after millennials seek jobs in Silicon Valley, which he said "is an insidious thing for us to do during this time in which we need to innovate."

Mr. Buzachero added while Scripps' culture is a drawing point for most employees, outdated and "clunky" technology sometimes repels younger individuals. He said healthcare as a whole has underperformed in attracting younger professionals, who are accustomed to using sophisticated mobile technology in their daily lives and expect to use the same tools in their workspace.

In addition to workforce shifts, all panelists identified physician burnout as a factor that impairs both the morale of an institution and patient care. Fifty-one percent of physicians reported experiencing frequent or constant feelings of burnout in 2017, up from 40 percent in 2013, according to Medscape's annual survey.

Sameer Badlani, MD, vice president and chief health information officer of Sacramento, Calif.-based Sutter Health, said, "Technology is often blamed as one of the reasons physicians are facing burnout. I would submit that's partially true, but not entirely true — and secondly, technology should play a role in physician engagement."

3. Navigating technology, cybersecurity and confidentiality

"Technology is a double-edged sword," Dr. Badlani said. He said healthcare is regularly enamored by shiny new toys and buzzwords, like cloud technology, predictive analytics, AI and blockchain. To keep focused and make the wisest investments, Dr. Badlani said it's imperative hospitals map out why they are investing in a certain solution, what the technology will solve and why previous attempts didn't work.

Ben Patel, CIO of Chicago-based Sinai Health System, said choosing the right technology is often hindered by regulatory pressure, confidentiality requirements and the growing threat of data breaches.

A recent analysis of healthcare breaches reported to HHS or the media in March 2017 found there were 1,519,521 breached patient records in March, representing a 155 percent increase in the number of breached records in January (388,307) and February (206,151) combined.

The growing rate of breaches and cyberattacks has forced healthcare organizations to assess technology from an ROI standpoint that analyzes not only what an organization can gain from solving a problem, but also the possible complications it could create, Mr. Patel said. Healthcare organizations are spending more time and brainpower examining how technology could expose a hospital from a security standpoint in an effort to ensure large investments don't create an equally costly confidentiality issue.

In addition, the best tools only add value if they help clinicians and administrators make sense of the myriad data EMRs generate, Mr. Buzachero said. He added the hospital industry is in need of "strong AI appendages that will help us make sense of what we got — to work smarter and more effectively."

4. Focusing on mission amid lowering reimbursement

Regardless of policy decisions made at the federal and state levels, Mr. Buzachero said providers will be affected by lower reimbursement in some fashion. He said this means "the cost structures of our organizations have to change rather dramatically." Although this presents difficulties, "the exciting thing about cost structure changes is it's finally causing us to imagine very different care models and different ways of reaching out to our patients," he said.

Keeping a "laser-like" focus on operating margins is critical, Dr. Badlani said. While historically healthcare organizations, especially nonprofit companies, have "shied away from being very bold about" discussing ways to improve their operating margins, he said "that needs to change … because as a community-based organization, whatever profit we make gets reinvested for the benefit of our community."

As leaders modify their hospital's cost structures to better position the organization to succeed, they must remember to consistently promote and uphold its mission, Mr. Buzachero added. Otherwise it will be difficult to obtain the cultural buy-in required for an effective operation. Dr. Badlani said that with countless changes coming down the pipe, the "best strategy is to remain very true to your mission and leverage technology" to dispense that message.

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